Debt Consolidation is not the Only Alternative!
The Bankruptcy
Procedure - Applicable in England
This article presents an overview of the bankruptcy law, as applicable for UK nationals and thereby sheds light on the relevant legalities to be provided for. Bankruptcy is a legal procedure to deal with debt. It is because of the formal proceedings involved, that it becomes essential to comprehend the term referred to as bankruptcy law.
About Bankruptcy Law
There are basically two routes, acceptable to the bankruptcy law that lead to bankruptcy. The first is chosen by debtor and the second is an option which can be exercised by the creditors. In the first route, debtor can file a debtor’s petition and seek relief from financial miseries, while as per the latter, creditor can file creditor’s petition and attempt recovery of debts. Either of the petitions can be filed at the High Court in London or any of the county courts. Creditors have an option of filling petition against the debtor, even if the debtor left the place or ceased all activities in any relevance. The maximum duration as stated in the bankruptcy law for this is three years. The bankruptcy proceedings are applicable, even if the debtor refuses to or decides to ignore the events.
Once the petition has been filed, either the Official Receiver or an Insolvency Practitioner comes into picture. As per the bankruptcy law, the Official Receiver is entrusted with the task of managing the entire affair and protecting debtor’s assets till the bankruptcy order is made. An Insolvency Practitioner is also an option to conduct bankruptcy affairs. Though for this, the IPO should be authorized by the Department of Trade and Industry or the relevant professional body.
What does Bankruptcy Law Require from the Debtor?
As stated earlier, debtor has to comply with the proceedings of bankruptcy law, even if the petition is filed by the creditor. Other important aspects include, providing all information as desired (including details on the imperative financial aspects), list of assets and liabilities i.e. how much the debtors owns, owes and to whom, various supporting documents like stock books, agreements, policies, etc. and maybe appear for an interview as well. This interview could be requested by the Official Receiver.
Bankruptcy Repercussions
As per the bankruptcy law, the bankruptcy will ensure that debtor no longer has a control over the assets. Only few items like clothing, bedding, etc., can be retained, but these too must be disclosed. Home may also be disposed, in order to settle claims. Even the benefits of increased property value are passed on to the trustees. Interest on life insurance policies can also be claimed by trustees as per the bankruptcy law. Moreover, there are various other business related restrictions to abide by.
The final stages i.e. bankruptcy discharge formalities, as per the bankruptcy
law happen at the end of maximum 12 months. With discharge, all debts and
attached restrictions are eliminated. The assets acquired after the bankruptcy
has been discharged, remain with the discharged bankrupt.
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